Skip to content

NISM Certifications · NISM-Series-XV: Research Analyst · Company Analysis - Business and Governance

A company reports revenue of ₹800 crore, with segments: Segment A ₹480 crore, Segment B ₹200 crore, Segment C ₹120 crore. Segment profit (EBIT) is A ₹72 crore, B ₹40 crore, C ₹12 crore. Which segment has the highest EBIT margin, and what is the margin of the lowest segment?

Segment B has the highest EBIT margin at 20 percent (40 divided by 200), while Segment C has the lowest at 10 percent (12 divided by 120). Segment A sits in between at 15 percent (72 divided by 480).

  1. ASegment B at 20%; lowest is Segment C at 10%Correct
  2. BSegment A at 15%; lowest is Segment C at 10%
  3. CSegment B at 20%; lowest is Segment A at 15%
  4. DSegment B at 20%; lowest is Segment C at 12%

Explanation

Margins: A = 72/480 = 15%, B = 40/200 = 20%, C = 12/120 = 10%. Highest is B at 20% and lowest is C at 10%. Option with C at 12% mistakes the absolute profit for a percentage, and the A-lowest option ignores C.

Did you get it right without looking?

One question tells you little. A timed set on Company Analysis - Business and Governance shows your real accuracy, how long you take and where you lose marks.

Practise Company Analysis - Business and GovernanceFree diagnostic mock

More Company Analysis - Business and Governance questions